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Mortgage approvals hit 11-month high

01 February 2013

The latest figures from the Bank of England show that UK mortgage approvals jumped to their highest level since January 2012 last month.

If you are looking to invest in a property, you can compare mortgages with MoneyExpert.

According to official figures, mortgage approvals rose from 54,011 in November 2012 to 55,785 in December 2012.

It is good news all-round for would-be buyers: net mortgage lending increased by the largest amount since April (£1.036bn) and interest rates on new secured loans to households plunged to their lowest since April.

Whereas the best five-year deal was around 4% last year, rates are now as low as 2.79%.

Yorkshire Building Society has become the latest lender to launch a 1.99% two-year fixed-rate mortgage. 

Rates offered on two-year fixed-rate mortgages have witnessed a steep drop over the past few weeks, and experts suggest these could fall as low as 1.5% as the Funding for Lending Scheme (FLS) continues to make its mark. 

The figures indicate that the Government’s £80bn FLS is starting to push up the amount of money being lent to home buyers. 

This follows the news that mortgages are currently more affordable than they have been in a decade. 

In the final quarter of 2012, the average household spent just 28% of its after-tax income on the monthly mortgage bill.

This has been slashed by half since the height of the financial crisis: in the third quarter of 2007, mortgage payments deprived new borrowers of 48% of their disposable income.

The dramatic drop means that typical households are being left with more of their disposable income than at any time since 2002. 

According to recent analysis by Halifax, new levels of affordability have sprung from a combination of lower house prices and reduced borrowing rates. 

If you are looking to invest in a property, you can compare mortgages with Money Expert.

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